The printing industry continues to face challenges, from rising labor costs to supply chain issues affecting the availability of materials, notably paper. Traditionally, printers have leveraged other print shops to outsource work during peak, seasonal demands or when lacking the technical ability to do more specialized work. With labor, costs, and supply chain problems likely to persist for the foreseeable future, printers must take a broader approach to outsourcing. There are four questions to ask to determine if work is better suited to produce in-house or to outsource.
Competency
Does the work requested by the client fall within your core competencies? If you commonly produce that type of job, then you have fine-tuned the processes to ensure quality, on-time delivery, and a satisfied customer. There is more risk for work that is not routine, so outsourcing may be the better route. For example, outsourcing is the best plan if you do not have the tools or experience to work with variable data printing and how to get it into the mail system cost-effectively.
Capacity
In some circumstances, it may be beneficial to outsource work based on your production schedule and capacity, even if the work is normally done in-house. Outsourcing such work allows you to meet customer deadlines or simply free capacity in-house for higher value or more complex work that needs your expertise and quality control. Outsourcing can also be beneficial for optimizing processes, particularly in finishing, where changing equipment configurations and setup can be time-consuming. Leaving your finishing lines unchanged gives greater throughput to produce standard jobs and applications while outsourcing non-standard finishing requests.
Capability
Printers are well-known for saying “yes” to customer requests and then figuring out how to do that type of work. They can control the client relationship and expand the amount of revenue per customer but may outsource the work since it is not a core competency. Not having the right expertise, i.e., variable data printing, or the right equipment, e.g., for grand format signage, are other reasons to outsource based on lack of capabilities. Outsourcing frequently happens due to large format sizes, complex bindery requirements like perfect binding, and enhancements and embellishments like foil.
Cost
While printers may try to be jacks of all trades, they want to be masters of none. In other words; there are some products printers are far more suited to produce than others. The correct processes, the right equipment, and competent staff are in place to produce those. All the efficiencies lead to lower production costs and the ability to retain margins on those products. It is difficult, if not impossible, to optimize and be cost-efficient with every type of printed product that customers request. For products that are out of their core competency, it is better to outsource that work. For example, outsourcing business cards or other business collateral shifts the lower margin work off your production schedule freeing time for work that you can produce efficiently and profitably.
There are many reasons to both insource and outsource work based on competency, capacity, capabilities, and costs. Printers can make the process seamless by configuring insourcing and outsourcing cost models in their print management information system (MIS). The 4over team can also help you evaluate what work is primed for outsourcing so you can leverage their large footprint, scale, and capabilities for many diverse printed products.
